Asia report: Markets rise ahead of Fed's final 2023 meeting

Hong Kong stocks led gains in the Asia-Pacific region on Tuesday as investors awaited the start of the US Federal Reserve's last meeting of the year.

The Fed's two-day meeting was set to start later in the global day, with the central bank widely expected to maintain the Federal Funds rate within the range of 5.25% to 5.5%.

In local news, producer prices in Japan rose faster than expected in their November reading.

"Most Asia-Pacific stocks were positive following gains on Wall Street," said TickMill market analyst Patrick Munnelly.

"The Nikkei 225 surged initially but steadily gave up nearly all of its gains as the effects of a firmer currency seeped through.

"The Hang Seng and Shanghai Composite were initially underpinned by China's Central Economic Work Conference and measures on integrated development of domestic and foreign trade, but the mainland index ultimately lagged."

Most markets rise across Asia-Pacific region

In Japan, the Nikkei 225 index rose by 0.16% to reach 32,843.70, while the broader Topix index experienced a slight decline of 0.23% to settle at 2,353.16.

Leading the gains on Tokyo's benchmark was Dainippon Screen Manufacturing, which saw an increase of 3.06%; Fujitsu, with a gain of 2.44%; and Nichirei, which rose by 2.15%.

In mainland China, the Shanghai Composite index advanced by 0.4% to reach 3,003.44, while the Shenzhen Component declined slightly by 0.08%, closing at 9,625.26.

Among the leaders in Shanghai were Anji Foodstuff, soaring by 10.04%, and China Reform Culture Holdings, which also registered substantial gains of 10.03%.

In Hong Kong, the Hang Seng Index jumped 1.07% to finish the day at 16,374.50.

Companies such as Hansoh Pharmaceutical Group led the positive momentum, with an impressive gain of 6.94%; China Resources Land, up by 5.91%; and Longfor Properties, which climbed by 4.94%.

South Korea's Kospi index posted a modest gain of 0.39%, closing at 2,535.27.

Hanjinkal and HD Korea Shipbuilding & Offshore Engineering were notable gainers, rising by 5.57% and 3.99%, respectively.

In Australia, the S&P/ASX 200 index saw a rise of 0.5% to reach 7,235.30, led higher by Telix Pharmaceuticals and Xero with gains of 4.71% and 3.79%, respectively.

However, New Zealand's S&P/NZX 50 experienced a decline of 0.58%, settling at 11,382.58.

Synlait Milk and EBOS Group led Wellington's losses, recording falls of 7.62% and 5.73%, respectively.

In currency markets, the dollar was last down 0.62% on the yen, trading at JPY 145.26.

The greenback was also weaker against its downunder counterparts, losing 0.34% on the Aussie to AUD 1.5175 and retreating 0.42% from the Kiwi to change hands at NZD 1.6260.

On the oil front, Brent crude futures were last down 0.21% on ICE at $75.87 per barrel, while the NYMEX quote for West Texas Intermediate decreased 0.15% to reach $71.21.

Japan producer prices unexpectedly rise, albeit slowly

In economic news, Japan's producer prices experienced an unexpected acceleration in November, increasing by 0.3% year-on-year, surpassing the 0.1% rise projected by economists surveyed by Reuters.

However, the 0.3% rise was still a deceleration from October's revised figure of 0.9%, marking the slowest growth rate since February 2021.

On a month-on-month basis, producer prices rebounded with a 0.2% increase after a 0.3% decline in October.

"The debate remains ongoing as to whether the Bank of Japan will need to relax its loose monetary policy, with the latest figure showing a moderation which could lead to the status quo being maintained," said Richard Hunter, head of markets at Interactive Investor.

Meanwhile, there was a substantial decline in exports in the Philippines, which plummeted by 17.6% year-on-year in October.

That was deeper than the 6.3% fall observed in September and marked the most significant drop since April.

On the other hand, imports recorded a year-on-year decrease of 4.4%, slowing down from the 14.7% decline in September.

The overall external trade volume for October amounted to $16.9bn, reflecting a 9.8% decrease compared to the same period last year.

Additionally, the Philippines' trade deficit expanded to $4.17bn - a notable increase from the $3.51bn deficit reported in September.

Reporting by Josh White for Sharecast.com.